In Iowa corn fields, Chinese national's seed theft exposes vulnerability

China Chemical

11/04/2016 06:00

By Julia Edwards 
    ARLINGTON, Iowa, April 11 (Reuters) - Tim Burrack, a 
northern Iowa farmer in his 44th growing season, has taken to 
keeping a wary eye out for unfamiliar vehicles around his 300 
acres of genetically modified corn seeds. 
    Along with other farmers in this vast agricultural region, 
he has upped his vigilance ever since Mo Hailong and six other 
Chinese nationals were accused by U.S. authorities in 2013 of 
digging up seeds from Iowa farms and planning to send them back 
to China. 
    The case, in which Mo pleaded guilty in January, has laid 
bare the value -- and vulnerability -- of advanced food 
technology in a world with 7 billion mouths to feed, 1.36 
billion of them Chinese. 
    Citing that case and others as evidence of a growing 
economic and national security threat to America's farm sector, 
U.S. law enforcement officials are urging agriculture executives 
and security officers to increase their vigilance and report any 
suspicious activity. 
    But on a March 30 visit to Iowa, Justice Department 
officials could offer little advice to ensure against similar 
thefts, underlining how agricultural technology lying in open 
fields can be more vulnerable than a computer network or a 
factory floor.  
    "It may range down to traditional barriers like a fence and 
doing human patrols to making sure you get good visuals on 
what's occurring," Assistant Attorney General John Carlin, head 
of the Justice Department's national security division, said 
when touring Iowa State University. 
    But agriculture sector executives say fences and guards are 
not feasible, due to the high cost and impracticality of 
guarding hundreds of thousands of acres.   
    Tom McBride, intellectual property attorney at Monsanto 
 MON.N  -- one of the firms whose seeds were targeted by Mo -- 
said it safeguards its genetically modified organism (GMO) 
technology by protecting its computers, patenting seeds and 
keeping fields like Burrack's unmarked. Monsanto says it is not 
considering physical barriers like fences or guards.  
    The FBI and the U.S. Justice Department say cases of 
espionage in the agriculture sector have been growing since Mo 
was first discovered digging in an Iowan field in May 2011. Over 
the past two years, U.S. companies, government research 
facilities and universities have all been targeted, according to 
the FBI. 
    Although prosecutors were unable to establish a Chinese 
government link to Mo's group, the case adds to U.S.-China 
frictions over what Washington says is increasing economic 
espionage and trade secret theft by Beijing and its proxies. 
    A U.S. law enforcement official told Reuters the agency 
looked for a connection between the Chinese government and the 
conspiracy carried out by Mo.  
    "In cases like this, we can see connections, but proving to 
the threshold needed in court requires that we have documents 
that the government has directed this," the official said. "It's 
almost impossible to get." 
    A Chinese embassy spokesman in Washington, Zhu Haiquan, said 
he did not have detailed information on the Mo case but that 
China "stands firm" on the protection of intellectual property 
and maintains "constant communication and cooperation" with the 
U.S. government on the issue. 
    On his visit to Washington last September, President Xi 
Jinping reiterated China's denial of any government role in the 
hacking of U.S. corporate secrets.  
    Mo, an employee of Chinese firm Kings Nower Seed, pleaded 
guilty to stealing seed grown by U.S. firms Monsanto, Dupont 
Pioneer  DD.N  and LG Seeds.  
    Prosecutors say he specifically targeted fields that grow 
the parent seeds needed to replicate GMO corn. The FBI says it 
suspects he was given the location by workers for the seed 
companies, but did not charge any employees. 
    DuPont Pioneer  DD.N  and LG Seeds declined to comment for 
this story. 
    Mo, whose case was prosecuted by the Justice Department as a 
national security matter rather than a simple criminal case, now 
faces a sentence of up to five years in prison. Five others 
charged in the case are still wanted by the FBI and are believed 
to have fled to China or Argentina. Charges were dropped against 
a sixth Chinese suspect. 
      
    NATIONAL SECURITY 
    The number of international economic espionage cases 
referred to the FBI is rising, up 15 percent each year between 
2009 and 2014 and up 53 percent in 2015. The majority of cases 
reported involve Chinese nationals, the U.S. law enforcement 
official told Reuters. In the agriculture sector, organic 
insecticide, irrigation equipment and rice, along with corn, are 
all suspected to have been targeted, including by Chinese 
nationals, the official said. 
    Mo Hongjian, vice president of Kings Nower Seed's parent 
company, Beijing Dabeinong Technology Group, declined to comment 
on the case or on the company's connection with the Chinese 
government.  
    The parent firm is privately owned, but says it receives 
government money for research in "science and technology." 
    China bans commercial growing of GMO grains due to public 
opposition to the technology and imports of GMO corn have to be 
approved by the agriculture ministry. Still, President Xi called 
in 2014 for China to innovate and dominate the technique, which 
promises high yields through resistance to drought, pests and 
disease. 
    In January, a Greenpeace report found some Chinese farmers 
are illegally growing GMO corn whose strains belong to companies 
including Monsanto, Syngenta  SYNN.S  and DuPont Pioneer. 
 ID:nL3N14R1CK   
    Monsanto, which supplies Burrack's seed, said it can block 
foreign groups who request to tour their lab and learning center 
in Huxley, Iowa. For the past few years, Monsanto says it has 
run its own background checks on Chinese delegations that ask 
for a tour, and, if they are approved, boosts security to be 
sure they do not steal anything or take pictures. 
    In Washington, U.S. senators have called for a review of the 
$43 billion deal by state-owned ChemChina to buy Swiss seed 
group Syngenta, which generates nearly a quarter of its revenue 
from North America. 
    Acquiring GMO seed and successfully recreating a corn plant 
would allow Chinese companies to skip over roughly eight years 
of research and $1.5 billion spent annually by Monsanto to 
develop the corn, the company says.  
    Burrack's farm itself was not targeted by Mo, though he 
grows the Monsanto parent seed that the Chinese national was 
digging for. Burrack grows the corn in two fields in front of 
and behind his house where he can watch them, a small part of 
his 2,800-acre farm. 
    He said he is told by Monsanto where and when to plant the 
parent seed, but has never been told to keep what he is planting 
a secret.  
    "What no one seems to understand is that they're stealing 
from people like me," Burrack said. "They're stealing the 
research that farmers pay for when they buy Monsanto seed." 
 
 (Reporting by Julia Edwards; Additional reporting by Shuping 
Niu in Beijing; Editing by Kevin Drawbaugh and Stuart Grudgings) 
 ((julia.edwards@thomsonreuters.com; +1 347 978 6592;)) 
 
Keywords: USA CHINA/SEEDS